The window for Paycheck Protection Program (PPP) loans closed last month, but businesses still need funding. Many business owners are still applying for other loans through their banks, yet economic conditions and tightening credit requirements can result in loan turndowns. So with everything that is going on with the economy and the COVID-19 pandemic, how can banks preserve their relationships with business owners?
The Risks of Loan Turndowns
Nobody likes to hear the word “No.” Even though businesses may have changed direction, decreased the capacity of in-store patrons, or moved operations online, they still need financing. However, small businesses that have build relationships with their banks over the years are at a higher risk for loan turndowns than in previous years. This can put previously strong relationships in jeopardy, and can even force businesses to look elsewhere for the financing they need. For banks, turndowns can result in fewer business clients and decreased earnings. The short-term uncertainty increases the risk for all parties involved – both businesses that need loans and banks that need to assess the viability of those loan applicants. There needs to be a compromise that can lower the level of risk to banks while still providing business clients with the financing they need.
Expanding Options and Lowering Risk
In order to minimize risk and turndowns while preserving relationships with business owners, banks are expanding their offerings through partnerships with commercial lenders. The programs offered by commercial lenders can supplement traditional loan programs. Equipment financing, working capital solutions, and other programs do not function like traditional loans, and offer an ease of accessibility so businesses can get the financing they need and banks can preserve their client portfolios.
Preserving Bank Relationships
At Web Finance Direct, we offer secure and confidential partnerships with traditional lenders. Banks can expand their offerings to clients who might not qualify for loans, or those who have reached their financing limits. Our programs include financing for working capital, equipment, commercial real estate, and more. We are committed to helping banks preserve their relationships with business clients. Contact Web Finance Direct today to learn more.